Wednesday, 21 November 2007

From Russia with… a bill

by Ajai Shukla
Business Standard, 20th Nov 2007

With collective eyes glued on the warming relationship with the USA, and the talked-up contest with China, most watchers have brushed off the icicles forming on the India-Russia partnership. But the foreign ministry rhetoric of “historical ties” and “strategic partnership that has stood the test of time” cannot paper over the widening cracks as a resurgent India and a resurrected Russia find themselves growing in different directions. The embers in the relationship have turned to ashes and things could get worse.

The politics are no longer right. New Delhi’s dance with Washington is timed in sync with Moscow’s adoption of a hard line towards the west. The trilateral Russia-China-India talk shop is an ineffectual band-aid over a deep sword cut, because Moscow has few expectations from either India or China. Russia’s Ministry of Foreign Affairs complains that both Asian giants pay lip service to multi-polarity, and the primacy of the UN, while actually aligning their foreign policies to the US in order to gain short-term objectives like the lifting of sanctions, preferential trade relations, and an easier visa regime.

Prominent foreign policy analysts in Moscow complain about “the inertial foreign policy thinking of Russia’s potential allies… including China and India.” Russian realists, who now make policy, know that Russia, even with its new hydrocarbon wealth, cannot match the US in dealing with China and India. Moscow, conclude these analysts, would do better to concentrate on its own back yard --- the Central Asian Republics and the Caucasian Republics of the former Soviet Union.

If this changing political dynamic is the invisible cause, its most visible symptom is the crumbling of the arms relationship. With Russia no longer shipping in subsidized weaponry, South Block has not yet fully accepted the purely commercial nature of Moscow’s arms sales to India. The acrimony over Russia’s insistence on renegotiating the price of the Gorshkov aircraft carrier, and the Sukhoi-30 fighters, symbolises the new relationship.

New Delhi’s irritation partly rests on its perception that Indian arms purchases have bankrolled Russia’s defence industry for the fifteen years after the Soviet Union melted down into a bankrupt Russia. When three quarters of Russia’s famous military design bureaus ran dry from lack of funding, putting a million defence scientists on the streets, India bankrolled Moscow’s defence production estate, placing orders for warships, fighters, missiles and avionic upgrades that kept Russian factories rolling. That Russia now wants to renegotiate the prices that were agreed upon then is seen in New Delhi as not just breach of contract but also breach of faith.

But India’s importance for Russia’s defence industry has diminished and that is due not just to the petrodollars flowing into Moscow’s treasury, enabling Russia to place large orders of weaponry for its own military. In addition, a new group of customers who are signing up for Russian weaponry have made Russia less dependent on sales to India. First China supplanted India as Moscow’s top buyer; in 2006 and 2007 a host of smaller countries have knocked China off the pedestal. Amongst the $14 billion worth of arms deals signed by Russia in 2006-07, the biggest customer was Algeria, with a $7.5 billion order for a range of defence systems. Venezuela placed a $3 billion order, while Malaysia, Indonesia and Vietnam ordered more than a billion dollars worth of Russian arms. Russian strategists exult at having broken out of “the China-India arms sales ghetto”.

But India remains dependent on Russian arms, for several reasons. With 70% of India’s military carrying Russian weaponry, switching to another supplier entails a cost in terms of inter-workability. Another reason is that Moscow remains either the only vendor willing to give India sensitive systems like nuclear powered submarines and strategic bombers, or to jointly develop futuristic equipment with India. Finally, in India’s fractured polity, Russia remains a politically acceptable supplier. New best friend, America, has signalled its willingness to sell India one of its front-line nuclear-powered aircraft carriers, the Kitty Hawk. But one has only to recall the furore from the Left when the Kitty Hawk came to the Bay of Bengal for exercises in September to realise that, like the US-India nuclear deal, India’s communists would vehemently oppose a Kitty Hawk purchase.

With the political logic and the arms relationship now entering a new trajectory, Russia and India cannot look towards trade and commerce to prop up their relationship. Bilateral trade is actually falling; from an insipid $5.2 billion in 1991, it has halved to $2.5 billion today. Without the proposed north-south corridor, through Iran, which is touted as the magic bullet for boosting Russia-India trade, the Prime Minister’s target of $10 billion by 2010 is thoroughly unrealistic.

Like in every relationship that changes over time, New Delhi must be nimble rather than nostalgic in reaching a new equation with Moscow. The energy relationship must be evaluated in a hard-nosed manner. Russia has already made it clear that future sales of nuclear reactors will take place only after India obtains exemptions from the NSG. And while India would like to be allocated oil exploration blocs in Russia as a favoured partner, Moscow would rather allocate them to western buyers, creating dependencies that could be leveraged later.

As India transforms into a regional, and then a global power, managing changing relationships will be a key challenge. Forging a mutually beneficial and more equal relationship with Russia is a high priority.

12 comments:

Vijay said...

I have long been unnerved by the cosy language used to couch the Indo-Russian relationship of the 21st century. It's isn't valid, it isn't real and a misplaced sense of nostalgia does nothing for us.

India's omnidirectional foreign policy was suited to the 90's and it has paid dividends. But, as the relationship beiween the US & India starts to concretise (allow my neologism) and Russia turns away from the West we need to stop playing footsie with the Ruski's.

An optimist would say that everybody is courting India and hence she can afford to be choosy. Alas, friendship has its prices and I believe the idea of an Iran-Pakistan-India oil pipeline isn't much liked by the US.

I hope the foreign polcy honchos realise that they shouldn't expect great things from Moscow. The US is actively courting us...we're a key swing state...there's a US-India Senate cauacus for goodness sake! Whether we get a republican or a democrat, Hillary or Obama...they will make relations with this subcontinental hegemon a priority.

This really is the Indian century and we have to intergrate with the West, the time is ripe. The combination of India and the Western world will counterbalance Chinese hegemony. The level of cultural hybridisation in urban India is mind-boggling...The Cultural, Economic & political congruence is patent. This is an opportune time in history.

The only caveat I offer is we continue to offer our role as leader to the developing world with the likes of Brazil by our side.

I would appreciateit if you took the time to reply and offer some of your insight into this and international affairs in general.

By the way, kudos to you Ajai for well-written and engaging article!

Vijay

Broadsword said...

Hi Vijay,

Thanks for that. I agree with all the points you make except for the one about the need to move away from an omnidirectional foriegn policy.

In fact, I would say that your observation about India being "a key swing state" challenges your own conclusion. If we are gaining benefits from being a swing state, why foreclose those by choosing a side?

Integrating with the West is happening anyway. But a closer cultural connection does not have to translate into a strategic alignment, especially when that would be (a) offensive to the other power blocs... (b) the gains are flowing from the West anyway... (c) the US would be more careful about the India relationship when there is an awareness that India has other relatiionships too... and (d) the direction of US policy globally is far from reassuring today.

May I also point you to a couple of articles I had written earlier for the Wall Street Journal Asia and Business Standard on the subject of what I termed "Superalignment". Would be interested in your critique on that.

best,

Ajai

mnbh said...

This is a very interesting point. Kitty Hawk would be a great bolster to our navy fleet but i really wonder why the leftists are so much against it. I wonder if the leftists will allow the MoD to choose the FA-18 / F-16 in the MMRCA deal? Makes me believe that some of our own establishment seems to work with a vested interest and a powerful set blatantly plug for the russians. I guess only time will tell whether our North Block mandarins are able to shake off the russian grip on our armed forces.

Vijay said...
This comment has been removed by the author.
Vijay said...

Ajai, thanks for your reply. I read your post on Superalignment.

Nobody's happier than I at the plethora of militaries seeking co-operation with India. It's great! India should keep dancing this dance of diplomatic promiscuity for as long as she can.

But, we really would be living in a fool's world if we convince ourselves that this goodwill is infinite (vis a vis "Washngton's ire concering New Delhi-Tehran"). The time shall come when we have to choose a side or undertake measures counter to the interests of those who thought their friendship with India water-tight.

As stated earlier, my preference for this side would be the West at large. I envisage India becoming another Japan except much more powerful, assertive and independent.

We cannot ignore China of course. But, I'm not an optimist when it comes to our Sinic brothers. We must undertake as many covert diplomatic and other inititaives as possible to counter their threat but bolster economic ties and diplomatic overtures simultaneously.

Long gone are the self-affirming days when Pakistan was "The other"...A benchmark to set our military against. The Chinese present a much more potent challenge.

To MNBH, I was tempted to mention my disgust with the redundant left and their useless protests against Kitty Hawk and their successful stalling of the Nuclear Deal in my previous post.

It does beg the question: Are they mad? Whichever way you look at it, the deal was and IS good for India. It would have legitimised us in the eyes of the international community in more ways than one (Although, the Western media loves us so its moot anyway).

We would have bonded with the most successful nation-state on the planet. How can that ever be a bad thing? What lenses to these people use? What is their world-view? The sad thing is nobody who orchestrated this is probably a true-blue Marxist. They are in for the self-interest...just like the rest of us.

All I can say is, I have never seen a more convincing argument in action against Indian Democracy than this farce.

P.S. Ajai: If you're interested in a better argued critique of your writing I reccomend "The Acorn" who was qute scathing of the article you wrote in July using the percieved decline of state-state warfare to argue against the purchase of large, conventional weaponry as insurgency is the main threat now. Unfortunately, the URL eludes me.

Do let me know whether you think there is something to be said for an Indo-Chinese rapprochment.

Best,

Vijay

pragmatic said...

Ajai:

Great piece. Very cogent and apperceptive. You might like to check my post which establishes that India's relationship with Soviets/ Russians was never "special". Till the cold war, it was based on Indian needs and Soviet opportunism; after that till the recent Russian resurgence, it was due to Russian economic needs and Indian military needs and opportunism.
All this is no reason to start sulking with the Russians. A substantial amount of our war-fighting machinery still needs Russian support. And how do you get the Russians to restart the supply of some critical spares? Indian establishment has to look at that very closely.

Ajai said...

Hi Pragmatic,

Seen your piece... I agree almost entirely.

The need to service Russian equipment, to continue to buy selectively from the Russians, to diversify to other suppliers, and all the while to build an indigenous capability... that's the direction we must take.

Which is why I am so scathing of agencies like DRDO and BEL, which create smoke-and-mirrors impressions of indigenisation, while actually fudging the process.

And we have an entire flock of starry-eyed rah-rah boys who, instead of offering hard-headed critiques of programmes that are going wrong and pats on the back to programmes that go right, choose instead to take positions like: everything that the DRDO is doing is just wonderful... or... HAL is marvellous and the AJT is the hottest thing to fly since the F-22.

Kya karen?!

Ajai

shanker007 said...

Dear Mr.Shukla, The Kitty Hawk aircraft carrier of the US Navy is not nuclear powered (as mentioned in your article) but conventionally fueled. It is the last of such with the US Navy, with it being scheduled to be replaced by the USS George Bush (a nuclear powered one) next year.

I personally think its a bad idea for India to purchase an aircraft carrier which was put to service in the early 60s. In fact I reckon reading from somewhere recently that Admiral Sureesh Mehta has ruled it out too.

Apart from that, the article is simply great. Keep it up sir.

vinod said...

Bad Idea to indulge with US on any hardware purchases for India's Wheels, Wings, Water forces, for, at the drop of the hat or on any filmsy ground, or any congressman's objection ( with few supporters who move the bill against india) US can stop spare supplies as they did with sea king helicopters which were grounded.

More, when this vessel is nearly 40plus years aged, translated into technical terms, it gobbles up spares at faster pace, check the recent machine parts log book of the vessel and find out how many parts have been replaced in the last semester.

Its a great folly to buy even US made pistols...let alone this kind of investment and a purchase of such mammoth carrier and be at the mercy of americans all the time.

vinod kukreja

Anonymous said...

Hi Ajai
Great article, there is one point of clarification. I have read that the kitty hawk is a conventional powered carrier. My source being wiki link http://en.wikipedia.org/wiki/USS_Kitty_Hawk_(CV-63)

however consider this a nitpick the article was great.

Regards

Yezdi

Anonymous said...

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Just saying hello while I read through the posts


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Anonymous said...

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